On Our Radar

On Our Radar

Why Mobile Shoppers Might Not Be So Good for Your Business

Are smartphones undermining your business? While mobile devices are often heralded as a retailer's best friend because they facilitate easier payments and provide more platforms on which to sell, a new poll of U.S. consumers reveals that these pocket-sized tools could also be a retailer's worst enemy.

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The poll by Thrive Analytics and the Local Search Association found that a majority of U.S. smartphone owners use their phones, at least sometimes, to compare prices while shopping at brick-and-mortar stores. And as eMarketer reports, these tech-savvy shoppers don't feel guilty about forgoing an in-store purchase for a digital one if they find a better price online.

While the poll found that young smartphone users (ages 18-29) were the most likely to use their phones inside stores (97 percent of them said they had done so), 91 percent of consumers ages 30 to 43 also said they use their phone while shopping. The report additionally found that 81 percent of young baby boomers (ages 44 to 53) take to their mobile devices in-store, and 69 percent of the oldest consumers surveyed, those ages 54 and up, said they use their smartphones while shopping at brick-and-mortars.

But why are so many customers pulling out their phones in stores? The majority of those surveyed said they use their phones to compare in-store and online prices. The research found that such showrooming — the practice of examining merchandise in-store before purchasing it online — is the number one reason that shoppers opt out of making in-store purchases.

However, before you implement a no-smartphone policy in your retail store, you should examine the facts. Not all of the shoppers included in this recent poll decided against a purchase after consulting with their smartphones. Only 65 percent of 18 to 29 year olds said they've opted out of an in-store purchase based on information they found via their smartphones. And the older the consumer surveyed, the less likely he or she was to base a purchasing decision on smartphone-facilitated research. [6 Ways Retail Will Change in 2014]

Sixty-two percent of Gen Xers (30 to 43 year olds) said they've opted to purchase something online instead of in-store after comparing prices on their phones. Meanwhile, only 45 percent of baby boomers ages 44 to 53, and 37 percent of baby boomers ages 54 and over said they based their purchasing decisions on smartphone-enabled price comparisons.

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And even though the Thrive Analytic/Local Search Association seems to suggest that smartphones are a threat to traditional retailers, another recent study found that this isn't the case at all. A new Deloitte Digital study, recently featured on The Wall Street Journal's financial website, MarketWatch, found that showrooming can actually increase in-store sales. Deloitte determined that the rate of in-store purchases went up by 40 percent when customers checked information on their smartphones before heading to the cash register.

The reason for this discrepancy? The Deloitte study said that, while price-checking and subsequent online purchasing can result when shoppers use their phones in brick-and-mortars, many shoppers actually use their devices for other purposes. The study found that smartphone-toting consumers often check out a product's technical details or read customer reviews from their devices. And both of these activities, rather than deterring a customer from making an in-store purchase, actually make it more likely.